CENT · Central Garden & Pet Company

Central Garden & Pet delivered record second-quarter fiscal 2026 results, with net sales rising 8.6% year-over-year to $906 million and GAAP diluted EPS increasing 30.6% to $1.28—driven by broad-based growth across both segments and disciplined margin expansion. Gross margin improved 30 basis points to 33.1%, reflecting favorable product mix and pricing discipline, while operating margin rose 140 basis points to 12.6%, aided by higher Pet segment operating margin (16.3% vs. 13.4%) and solid Garden segment performance despite flat operating margin (15.4% vs. 15.5%). The Pet segment contributed $477 million in sales (+5.1%), led by Dog & Cat and Animal Health, and Outdoor Cushions shipments shifting into Q2; the Garden segment posted $429 million (+12.9%), fueled by timing shifts and new listings in Grass and Fertilizer. Management attributed the results to consistent execution and improving organizational performance. Notably, the company announced a strategic pet distribution partnership with Phillips Pet Food & Supplies following quarter-end—structuring it as an independent entity where Central retains a 20% equity stake—intended to simplify operations and refocus on branded growth. While the partnership is expected to have minimal EPS impact, it signals a material shift in go-to-market strategy for the Pet business. Central reaffirmed its full-year non-GAAP diluted EPS guidance of $2.70 or better, citing continued margin discipline, growth investments, and portfolio optimization, and noted that the outlook excludes potential impacts from future acquisitions, divestitures, or restructuring—including initiatives under its Cost and Simplicity agenda. Liquidity remains robust, with $653 million in cash and no borrowings under its credit facility, supporting ongoing capital return and strategic flexibility.